Probate: A Simple (But Complete) Guide
What is probate, how long does it take and how much will it cost? Find out everything you need to know about probate with our simple guide.
By MyLegalAdviser - Last Updated September 2018
Losing a loved one is hard enough without all the admin you’re expected to take care of. Chief amongst those is obtaining 'probate'.
So what is probate, do you need it and how do you go about getting it?
IN THIS GUIDE:
- What is probate?
- Do you always need probate? Take the quiz
- Who applies for probate?
- Overview of the probate process
- Free probate checklist
- Inheritance tax
- Applying for probate
- How long does probate take?
- How much does probate cost?
What is probate?
You've probably heard of probate, but do you know what probate actually is?
What does probate mean?
The dictionary defines probate as 'the official proving of a will'.
Pretty unhelpful right?
That's because probate is actually a legal term. It means submitting a Will to the court for validation.
These days, the term probate is more commonly used to mean something more than just the strict legal definition. Here's a more helpful definition:
Probate (noun) the process of dealing with someone's estate after they die.
What is a ‘Grant of Probate’?
A Grant of Probate is a formal document the court issues to the executors confirming their authority to deal with the estate.
The executors will need the Grant when dealing with estate assets held by third parties (e.g. to sell the deceased’s house).
What is the difference between probate and letters of administration?
Although ‘probate’ is used to describe the general process of dealing with a deceased’s estate, the actual process depends on whether or not the deceased left a Will.
If the deceased did make a Will the executors (named in the Will) will apply for a Grant of Probate.
If the deceased did not make a Will, they are said to have died ‘intestate’. When this happens the personal representatives apply for what’s known as Letters of Administration. This is a slightly different process with ‘administrators’ being appointed instead of ‘executors’.
If the deceased's Will doesn't deal with all of their assets and/or didn't appoint executors, they are said to have died ‘partially intestate’. When this happens the intestacy rules will govern part of the estate. If no executors were appointed in the Will or are able to act, then the administrators will apply for what's known as 'letters of administration with will annexed'.
In a nutshell:
Whether or not you need probate and/or to file an inheritance tax return will depend on various factors such as: whether the assets were jointly owned, their value and whether the deceased made a Will.
The quickest way to find out if you need probate and/or to file an inheritance tax return is to take our questionnaire:
When is probate not required?
If the estate is very small and simple (usually under £5,000) and/or all the assets were jointly owned (e.g. bank accounts or property), you may not need a Grant.
This is because most companies (e.g. banks), will transfer assets below a certain threshold without requiring a Grant. If the amount held at an institution is small (e.g. less than a few thousand pounds), it's worth checking if they'll require a Grant to transfer the assets.
Property held jointly (e.g. joint bank accounts and property held as joint tenants) automatically pass to the survivor. A Grant isn't needed for these assets.
You may not need probate if the deceased only died with:
- Property held as joint tenants
- Joint bank accounts
- Bank accounts, pensions or share portfolios with small sums where the institution doesn't require a formal Grant
When will probate be required?
Where the estate has assets worth over £5,000 (e.g. stocks and shares, savings and bank accounts, etc.) you will usually need to obtain probate.
You will always need probate if the deceased owned property (unless it was held as ‘joint tenants’ with another person).
Who applies for probate?
If the deceased left a Will, the 'executors' will apply for probate.
What is an executor?
Executors are appointed in the Will. They have various duties to administer the estate of a deceased in accordance with their Will.
Any willing and able adult can be an executor (including beneficiaries and executors).
Do you have to act if you're appointed as an executor?
Executors don't have to act. They can either renounce their executorship permanently or they can reserve power.
Reserving power allows the executor to act in future if needed. It is often used when the executor is based abroad and it is difficult for them to sign documents.
Overview of the probate process
The executors have a duty to administer the estate and apply for probate. A summary of the executors' duties and general process of applying for probate is as follows:
- Register the death - the death should be registered within 5 days at the local register office. Family members will often do this but the executors may need to if they don't. It's best to get a few copies of the death certificate (you'll need these going forwards) and a Tell Us Once reference number (to notify most government departments in one go).
- Find the original Will - this is often with: the deceased's paperwork at home, their solicitor, their bank or the Probate Service. The Will should be kept safe and the other executors should be notified.
- Arrange the funeral - family members may do this, but if they don't the executors may need to. Check the Will for any wishes the deceased had relating to their funeral and notify friends and family. It may be possible to pay the funeral invoice by presenting it along with a copy of the death certificate to the deceased's bank.
- Value the estate - compile a list of everything in the estate (property, possessions, bank accounts, investments, debts, etc) and obtain valuations. For property and high value items, you may need to obtain a professional valuation.
- Secure any property - ensure the deceased's property is secured and insured (insurance may lapse on the death of the policy holder).
- Finances - send copies of the death certificate to banks, building societies and insurance companies and ask them to stop any direct debits and payments. Stop any government pension payments. Check if the deceased needs to file a tax return and if they owe or are due a repayment of tax. Consider setting up an executors bank account if you aren't going to use a solicitor (in which case they can hold cash in their client account).
- File inheritance tax returns & pay inheritance tax - complete the inheritance tax returns and file these with HMRC by the IHT return deadline. Pay any inheritance tax due by the IHT deadline.
- Apply for probate - if probate is needed you'll need to complete form PA1 and send all the relevant documents to the Probate Registry.
- Pay any debts - pay any debts and place a deceased estates notice in The Gazette to protect against creditors.
- Distribute the estate - once all the debts are paid, distribute the assets to the beneficiaries in accordance with the Will.
Before the executors can apply for probate, they'll need to value the estate and file an inheritance tax return (unless the estate is very low value).
Most estates will need to file an inheritance tax return. The type of return depends on the value of the estate.
IHT205 - if there isn’t any tax to pay (e.g. due to a low value estate or the spouse exemption), the executors or administrators will usually file the IHT205 account. This is a shorter and simpler version of the inheritance accounts.
IHT400 - if there is inheritance tax to pay and/or the estate is valuable/complex, the executors or administrators will need to file the more complex IHT400 account.
When do inheritance tax returns need to be filed?
Inheritance tax returns must be filed within 12 months from the end of the month in which the death took place.
For example, if the deceased died on June 3rd 2018, the inheritance tax return would be need to be filed by the end of June 2019.
In any case, the inheritance tax forms must be completed before applying for probate.
How is inheritance tax calculated?
Inheritance tax is payable at 40% on all the assets the deceased owned which are:
- not exempt assets
- not exempt gifts
- over the tax free amount
Significant gifts which the deceased made in the 7 years before their death can also be included in the deceased’s estate when calculating inheritance tax.
What assets are exempt from inheritance tax?
Some assets are not subject to inheritance tax. The rules are complex but some examples include:
- business property (e.g. a family owned business).
- agricultural property (e.g. a working farm).
- non-UK assets owned by a non-UK person who hasn’t lived in the UK for more than 15 years.
What gifts are exempt from inheritance tax?
Some gifts are free of inheritance tax. These can include:
- gifts between spouses (although a gift to a foreign spouse may not be included)
- gifts to charity
Where the tax free amount was not used on the death of the first spouse (e.g. because they left everything to the surviving spouse) the unused amount isn’t lost. Instead, the executors can claim the unused amount on the death of the second spouse.
Everyone in the UK gets a tax free amount. For 2018/19, the tax free amount per person is:
- £325,000 per person (the Nil Rate Band); and
- an additional £125,000 where the deceased leaves property to their descendants (the Residence Nil Rate Band). This amount reduces where the estate is worth over £2 million.
The Residence Nil Rate Band will increase to £175,000 per person by 2020/21.
In total this means that for 2018/19:
- spouses can usually leave all their assets to each other free of inheritance tax (this does not apply to unmarried partners).
- an unmarried person can leave a maximum of £450,000 free of inheritance tax to their heirs (providing this includes a property left to children/grandchildren).
- a married person with a spouse who died before them and who didn’t use their tax free amount can leave a maximum of £900,000 free of inheritance tax to their heirs (providing this includes a property left to children/grandchildren).
The inheritance tax rules and forms are complex and failing to get proper advice could mean paying too much inheritance tax. If you need help, why not post a free job and compare quotes from local solicitors on our site within minutes?
When is inheritance tax payable?
Inheritance tax is payable within 6 months from the end of the month in which the death took place.
For example, if the deceased died on March 3rd, inheritance tax would be payable by the end of the following September.
Once the executors have filed the inheritance tax returns, they can apply for probate.
To apply for probate the executors will need to:
- complete form PA1 (the probate application form).
- send form PA1, death certificate, original Will (plus two copies) and the application fee (usually £215 + 50p per copy of the grant required - see PA3) to their nearest probate registry (see form PA4).
- if the executors didn’t apply online, swear the Oath in front of a solicitor or at the Probate Registry and return this to the Probate Registry.
It’s well worth requesting a few copies of the Grant of Probate. This allows the executors to contact all the institutions at the same time and saves having to wait for copies to be returned.
What happens after probate is granted?
Once probate is granted the executors can get on with administering the estate by paying any debts and distributing the assets the beneficiaries.
The executors, or their solicitors, will need to draw up estate accounts for each beneficiary detailing all the assets, debts and income.
Once all the assets are distributed and debts paid, the estate can be wound up. If the Will created any trusts, the executors will often also be the trustees and so will have an ongoing duty to manage those trusts.
How long does probate take?
The annoying answer is...it depends.
More complicated and higher value estates will take longer than simple ones.
As a general rule it will usually take between 9 and 12 months to obtain probate. Most of this time will be spent gathering details of the deceased's assets and liabilities and preparing the inheritance tax returns.
It can take much longer to obtain probate for estates with high value assets, foreign elements and/or disputed disputed inheritances.
How long after probate is granted does it take to receive an inheritance?
Once probate is granted, beneficiaries will usually receive their inheritance relatively soon afterwards.
However, where there is a potential disputes with creditors or beneficiaries, this could slow things down.
How much does probate cost?
We'd love to give you a simple answer here, but we’re afraid there isn’t one.
Every estate is different and the costs will depend on the complexity of the estate.
How much are solicitors fees for probate?
The only way to find out how much probate will cost you is to get some quotes from solicitors.
That's where our service can help. We'll get you a range of quotes for your exact job from local solicitors in minutes when you post a free job.
Post a free job on our service and compare quotes from local solicitors in minutes. Save an average of 44% on solicitors fees vs going direct!
We’ve analysed thousands of quotes and, as a general guide, the average fee to obtain a Grant of Probate is £500 - £1,500.
Help with administering the estate once the Grant is issued will usually cost a further £500 - £1,500.
Solicitors fees will vary from estate to estate and firm to firm though. So what someone else pays may be completely different to what probate will cost you.
What other probate fees/costs are there?
In addition to any solicitors fees, the estate will need to pay the probate application fee (£215) and 50p per extra copy of the grant.
There may be further fees which need to be paid as part of the administration of the estate. These will vary from estate to estate, but might include things such as: valuation fees, brokerage fees or insurance.